Distinguish between the following:  Director and Managing Director Largest Online Education Community

Distinguish between the following: Director and Managing Director Largest Online Education Community


Yes, a Managing Director can be removed from their position by the board of directors or shareholders. A Managing Director is a senior executive who is responsible for the overall management and operations of a company or organization. They typically report to the Board of Directors and are responsible for setting and achieving strategic goals, as well as managing day-to-day operations and ensuring the company’s financial performance.

In general terms, a Managing Director is a person who is responsible for administering the daily operations of a company. He is also liable to plan, direct and control the functioning of the company. On the other hand, a Whole-Time Director includes a director who is in the whole-time employment of the company, commits whole of his time and attention to carry on the affairs of the company in question and has a considerable personal interest in the company as his source of income. Section 203 of the Companies Act, 2013 provides that an individual shall not be appointed as the chairperson of a company as well as the MD or CEO at the same time unless the articles of such company provide otherwise or the company does not undertake multiple businesses. The Chicago Booth ADP is a rigorous learning journey across 8 modules spread over 9 months and gives you access to the latest management thinking and tools. It is taught by an award-winning faculty at the Chicago Booth School of Business and accomplished senior business leaders.

How can a Managing Director be appointed in multiple companies as per Companies Act 2013?

Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing. Accounting for the company’s activities to relevant parties, e.g. shareholders. In case the Director hasn’t acquired the qualification shares within the stipulated time frame and such company goes into the liquidation after the expiry of this period, such Director would be called upon by Official liquidator for paying for such shares he was supposed to acquire.

During their operations in the director vs managing director, they must be attentive and cautious. The company does not have the power to retire such directors, nor are they retired by rotation. Only the agencies who have nominated such a director can remove the nominee director. If the existing director of the company is not present in India for the last three months, then the company shall appoint an alternate director in his place. A company has different types of directors, and all of them have different roles in the company.

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Now, to get the role aligned in conformity with the corporate governance standards, the role is being strengthened by redesignating it as chairman and managing director, they added. Most large companies, particularly family-run ones, in India have the same person as the chairman and managing director. Mukesh Ambani is the chairman and managing director of Reliance Industries Ltd, India’s most valuable company. Richest Asian Gautam Adani is the chairman and managing director of the Adani Group. All state-owned firms as well as the private sector either have a chairman and managing director or a CEO looking after the day-to-day functioning of the company and a chairman heading the board.

Corporate Law Referencer

However, a https://1investing.in/ above 70 years can be appointed as a managing director by passing a special resolution in the general meeting after obtaining the shareholders’ approval. In such a case, the explanatory statement annexed to the notice for passing such a resolution should state the justification for appointing such a person. The Companies Act, 2013 (‘Act’) defines a managing director as a director entrusted with substantial powers of managing the company affairs by virtue of either an agreement with the company, articles of association or a resolution passed in its general meeting or board of directors. However, the managing director must exercise their powers subject to the board’s control, superintendence and direction.

Overall authority and decision-making power in the company. The role of a Managing Director often includes strategic planning, while the role of a Whole Time Director typically includes oversight and governance.

What is the different between director and managing director?

A Managing Director is typically the highest-ranking executive in a company, while a Whole Time Director is a member of the company's board of directors. A Managing Director usually reports to the board of directors, while a Whole Time Director is a member of the board and reports to the shareholders.

At every annual general meeting of a public company, or a private company which is a subsidiary of a public company, one-third of the directors liable to retirement by rotation or if their number is not three or a multiple of three, then, the number nearest to one-third, shall retire from office. The managing director of a company is in charge of the organization’s daily operations and is under the purview of the CEO , the executive head of a company. He or she is also expected to keep a company solvent and facilitate its expansion and growth. In other words, the managing director is entrusted with substantial powers of management and is in charge of the company’s affairs.

Small Shareholders Directors

A person can be appointed as the Managing Director in multiple companies subject to the prior unanimous approval of the Board of Directors and the shareholders in the General Meeting of the Company by passing a Ordinary Resolution. Every public company or a private company which is a subsidiary of a public company, having a paid up share capital of Rs. 5 crores or more must have a managing director or wholetime director or manager. 19.1 The conditions for disqualification of a director should be prescribed in the Act itself as they relate to the substantive law and may not require much change once the law is framed.

What is higher than a director?

While both roles are in leadership, a VP is truly senior leadership. This means that not every director will have the skills, personality, or vision to advance to the VP level.

Although the Companies Act, 2013 does not contain any such stipulation, it certainly does not augment the position of the managing director as he continues to operate as per the terms of reference set by the Board. The Managing Director of a company oversees the function and performance of different departments. They also look after the daily performance and functioning of the departments or managers under them. Oftentimes the Managing Director is part of the board of directors. They work closely with the board to create policies and strategies for the success of the company. A Managing Director’s role isn’t written in stone, and can also involve aspects of a COO’s role or a vice president’s role too.

O If the person is appointed in the Board Meeting and the same is not approved in the General Meeting the actions done by the Managing directors from the date of appointment to the date of general meeting will be valid unless there is any public interest being effected or fraud involved. O But a Person who is above 70 years can be appointed as a Managing Director with a special resolution and approval from the Central Govt, which will be given with proper reason for the appointment of such person. Every Company must have Directors and they will be called the Board of Directors . But all the directors cannot engage in the management of the company due to different reasons. For smooth running of the company they elect one person to manage all the affairs of the company. And the person can be a Manager or a Managing Director but not both at a time.

There were three foreign Directors in a Company who left in middle because of some conflicts with Indian Directors. There DINs are deactivated and therefore, the Company is not able to file Form DIR-12 for their removal from the records as the DINs will not get pre filled. He/she should not assign his/her office since such assignments are void under the law. He must prevent getting engaged in situations where he or she may have an indirect or direct interest that conflicts with the interests of the company.

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  • Such appointments may be made once in every three years and interim casual vacancies being filled by the Board of Directors as Casual Vacancies.
  • The administrative acts of a routine nature such as a affixing common seal , draw and endorse any cheque or negotiable instruments, signing share certificates, etc are excluded from the sphere of substantial powers to be exercised by the managing director.
  • They are also tasked with liaising with the shareholders of the company.
  • Just upload your form 16, claim your deductions and get your acknowledgment number online.

They can build strong relationships with external stakeholders, such as customers, suppliers and investors, which can be beneficial for the company’s reputation and bottom line. They can provide mentorship and guidance to other employees, which can help to create a positive work environment and promote employee engagement. Risk of isolation, as the Managing Director is often the highest-ranking person in the company. Risk of reputational damage if the company faces negative publicity. Risk of financial loss if the company performs poorly. Responsibility for the overall performance and success of the company.


A company cannot appoint or employ a managing director and a manager simultaneously. A managing director cannot hold the office of a director in more than 20 companies, including alternate directorship. The appointed managing director and the company in which he/she is appointed should confirm the same with the ROC. The executive division of a company is in charge of its day-to-day functioning. 2013 (hereinafter referred to as “the Act, 2013”), the expression “Key Managerial Personnel” is used to define executive management. They are the point of first contact between the company and its stakeholders.

Is a director higher than a managing director?

Does a managing director have more powers than a normal director? Company law makes no distinction between a managing director and any other kind of director, and provides no definition of the term 'managing director'.

This provision does not apply to a private company unless it is a subsidiary of a public company. However, a person may be re-appointed, re-employed, or his term of office extended by further periods not exceeding five years on each occasion. Such re-appointment, re-employment or extension cannot be sanctioned earlier than two years from the date on which it is to come into force. Provided further that the number of the directors and additional directors together shall not exceed the maximum strength fixed for the Board by the articles. A company, at a general meeting may, by ordinary resolution, increase or reduce the number of its directors within the limits fixed in that behalf by its articles. This provision shall not apply to a private company, unless it is a subsidiary of a public company.

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Both positions are usually appointed by the board of directors or shareholders. A Managing Director is usually appointed by the board of directors, while a Whole Time Director is appointed by the shareholders of the company. Insurance for key-man and for key directors and officers of companies by means of general insurance policies may be taken by companies.

All three shall drive their power from the Board of Directors and report to the Board only. There is no difference regarding power and duties of Managing Director, Manager and Chief Executive Officer as such. He is elected at the Annual General Meeting by the members of the company. Authorise Company Secretary to issue a notice of the general meeting on the Board’s behalf. Thank you for your interest in the Chicago Booth ADP – India.


Disqualification and salary criteria for managing directors. By virtue of a resolution passed by the Board of directors. When discussing the differences, a Managing Director is responsible for the day-to-day business of a company while a Chief Executive Officer does not have huge responsibility for the day-to-day affairs of a firm. Efiling Income Tax Returns is made easy with Clear platform.

Is managing director higher than VP?

On Wall Street, managing directors are department or division heads. Senior vice presidents and vice presidents are on lower rungs of the corporate ladder. Anywhere else, except in Hollywood, the title director is a middle-management title, roughly equivalent to a vice president but lower than a senior vice president.